A governance dispute within the Aave ecosystem escalated as two detailed reports offered contrasting perspectives on past funding and contributions ahead of a vote on a proposed $50 million package for Aave Labs.
On Wednesday, Marc Zeller, founder of the Aave Chan Initiative (ACI), published a transparency report reviewing Aave Labs’ historical funding, applying a return-on-investment framework to prior DAO grants. Hours earlier, Aave Labs released its own report highlighting its contributions to the protocol since 2017.
The dispute revolves around the “Aave Will Win” proposal, which requests tokenholders’ approval for funding of up to $42.5 million in stablecoins and 75,000 AAVE tokens. Under the plan, Aave Labs would channel 100% of revenue from Aave-branded products to the Aave DAO treasury through a DAO-funded operating model.
The debate extends beyond the funding size to issues of accountability, revenue attribution, and who maintains the protocol’s core infrastructure. The controversy comes as BGD Labs, a key technical contributor, announced it will end its involvement with the DAO on April 1.
Conflicting views on funding and value
Zeller’s report noted that Aave Labs has received roughly $86 million in total capitalization, including 2017 ICO proceeds, venture funding, and DAO payments. He argued that future DAO grants should be assessed using measurable revenue impact and stricter disclosure standards.
ACI, which serves the Aave DAO and is not neutral in the debate, questioned whether governance votes should separate funding, revenue alignment, and V4 ratification. Zeller emphasized that funding decisions should be tied to performance benchmarks and transparent reporting.
In its contributions report, Aave Labs emphasized its role in designing and launching Aave V1, V2, and V3, highlighting features that support the protocol’s current revenue model, including flash loans, the Safety Module, and Efficiency Mode.
The report argued that simply tallying governance proposals or forum posts does not capture the full breadth of research, development, security, and infrastructure work needed to operate a protocol serving millions of users.
What Tokenholders Are Voting On
Under the “Aave Will Win” proposal, Aave Labs would shift to a DAO-funded operating model, directing product-level revenue—from aave.com and upcoming consumer-facing offerings—into the Aave DAO treasury.
The proposal also seeks ratification of Aave V4 as the protocol’s long-term technical foundation and outlines the creation of a new foundation to manage the Aave brand.
Some community members have expressed concerns over the size of the funding package and the inclusion of 75,000 AAVE tokens, which carry governance voting rights.
On Feb. 13, critics called for clearer revenue definitions and greater transparency regarding governance holdings.
